NOV. 7, 2008
:NWLP
11/5/08
10:04 AM
Page 2
...Freightliner to exit Portland
(From Page 1)
company offers a generous enough sev-
erance package, that would give them
incentive to stick around until the end.
If too many workers quit before the
closure, the company could recall
workers laid off in earlier waves. The
company is expected to keep produc-
tion going until the end, and may build
up inventory to cushion the transfer.
Because the assembly makes use of ex-
pensive robotics, Daimler will have to
shut down the Portland plant and trans-
fer the machinery before production
can begin elsewhere.
The Swan Island plant employs
some skilled workers, including certi-
fied welders, electrical repair workers
and workers in some machine and
building maintenance classifications. If
the currently worsening economy re-
bounds by 2010, they may be able to
find equivalent work elsewhere in
town.
But most of the workers to be laid
off are in unskilled assembly jobs. Be-
cause they have a union, and because
the company has continued to be very
profitable, those Machinist-represented
assemblers make $22.75 an hour plus
b h
m k
full benefits. Once laid off, they’ll be
very unlikely to match that compensa-
tion in other unskilled work.
Less senior employees were the first
to be let go in earlier waves of layoffs,
so all those who remain at the Swan Is-
land plant have been there since at least
1995. Their average age is 48, and a siz-
able fraction are workers in their 50s.
Some may be eligible for early re-
tirement, with a reduced benefit. For
example, a 55-year-old worker who’d
been there for 30 years could take early
retirement; under the Machinists con-
tract, members can take early retire-
ment if their age plus years of service
equals 85.
For those who can’t retire, the best
hope may be to accept a package of
federal government benefits offered by
the U.S. Labor Department’s Trade Act
Assistance (TAA) program. Because
work is moving to Mexico, this plant
closure is almost certain to be deter-
mined trade-related, That will make
workers eligible for TAA benefits, in-
cluding employment counseling, tu-
ition reimbursement for up to two
years of trade school or technical edu-
cation, up to two years of unemploy-
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PAGE 2
ment benefits, a health insurance sub-
sidy, job search and relocation assis-
tance, and a wage subsidy to give em-
ployers incentive to hire them and
provide on-the-job training.
Anti-union types sometimes blame
plant closures on “excessive” union
wage and benefit demands. But odds
are that no union concession could
have stopped Daimler from moving to
produce trucks in Mexico, when truck
assembly workers in that country make
less than a fourth of the Portland work-
ers’ wages.
And there are other reasons for the
move. As Daimler put it in the an-
nouncement, “a migrating supplier
base and high logistics costs have had
a major impact on the cost of produc-
tion in [Portland].” In other words,
roughly translated: Earlier decisions to
outsource production of Freightliner
parts to Mexico meant the company
could now also save money by not
having to ship those parts to Portland
for assembly.
Next February, the company will
launch a new truck which will be mar-
keted as the premier model in the
Freightliner brand lineup. It’ll be
named Cascadia, a nod to the mighty
Cascade mountains of the Pacific
Northwest. Sierra Madre might have
been a more appropriate name, how-
ever, since that’s the mountain chain
visible from the company’s brand-new
manufacturing plant in Saltillo, Mex-
ico, where the new truck model will be
made.
Machinists Union Representative
Joe Kear lays blame for the Portland
plant closure on politicians who sup-
port NAFTA, the North American Free
Trade Agreement.
“These trade agreements need to be
renegotiated,” Kear said. “We need to
have tariffs again that protect key jobs
and industries in the United States.”
At one time, the American truck
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NORTHWEST LABOR PRESS
The last Freightliner brand truck rolled off the assembly line at the Portland
Swan Island plant on March 29, 2007. More than 600 workers were displaced
as owner Daimler-Chrysler moved manufacturing to a huge new facility in
Santiago Tianguistenco, Mexico.
manufacturing industry was protected
by tariffs of up to 15 percent, which
made it hard to import trucks profitably
for sale in the United States. But
NAFTA, which began to take effect in
1994, brought Mexico gradually into a
tariff-free zone with the United States
and Canada. Freightliner began mak-
ing its first moves to Mexico in 2000.
Freightliner was the brainchild of
Leland James, president of Consoli-
dated Freightways (CF), a Portland-
based trucking company. In the 1930s,
James had an idea for a lighter truck
that would save on fuel costs for his
company, so he hired engineers and
built it.
The Portland Freightliner plant
started production in 1947, and moved
to its present Swan Island location in
1969. But in 1979, trucking was dereg-
ulated. Union trucking firms were hit
hard. CF decided to sell Freightliner in
1981, and found a willing buyer in
Daimler-Benz AG, the German multi-
national known for the Mercedes-
Benz.
Daimler-Benz, which became
Daimler-Chrysler with the purchase of
Chrysler in 1998, continued to buy
other North American truck brands, in-
cluding Ford’s heavy truck division,
which then became the Sterling brand,
and Canada-based Western Star
Trucks, which specializes in cus-
tomized heavy-duty trucks for mining,
logging, and oil fields.
In 2000, Daimler started making its
more downscale Freightliner trucks in
Santiago Tianguistenco, Mexico. The
following year it outsourced Freight-
liner parts production and closed the
Portland parts plant. Western Star pro-
duction was relocated to Portland in
2002, and the Kelowna, British Colum-
bia plant where it had been made was
closed. In 2007, Daimler sold money-
losing Chrysler and moved production
of its flagship Freightliner truck model
from Portland to Santiago Tianguis-
tenco and North Carolina.
And the Portland plant closure is
just a small part of the restructuring an-
nounced Oct. 14. Daimler will also be
discontinuing the Sterling Truck brand
in March 2009, and close the Canadian
Auto Workers–represented plant in St.
Thomas, Ontario, where the medium-
and heavy-duty trucks are made; about
700 workers are being laid off there
this month, and 700 more will go when
the plant closes.
The closure of the Portland plant
will decimate Machinists Lodge 1005.
The automotive mechanics local will
drop from 1,100 to 470 active mem-
bers. [The local also has close to 700
retired members, who are voting mem-
bers under the union’s Constitution.]
Lodge 1005 will continue to represent
diesel mechanics at Peterbilt, Cum-
mins, Swan Island Dairy, Safeway, and
the City of Portland, as well as workers
at Silver Eagle Manufacturing, a manu-
facturer of converter dollies and light
trailers.
And there are sure to be ripple ef-
fects on the local economy as local
suppliers lose business and the laid off
employees cut back spending. Portland
Mayor-elect Sam Adams called the
closure “a punch in the gut for Port-
land’s economy.”
The closure will also end an emo-
tional connection that thousands of
Portland families have had to the com-
pany. Tom Chamberlain, president of
the Oregon AFL-CIO and a former
president of Portland Fire Fighters Lo-
cal 43, remembers what a difference it
made growing up when his father went
to work at Freightliner in 1961.
“It changed our life,” Chamberlain
recalls.
His family was able to move from a
house without a bathtub or shower to a
house that had one. They ate better.
Relatives who’d been working as
poorly paid ranch hands in Nebraska
moved to Portland to work there too.
And when the younger Chamber-
lain grew up and started work as a fire-
fighter, it meant something that all the
fire rigs in Portland were also made by
Freightliner.
“It was a Portland company,”
Chamberlain said. “We had a lot of
pride in that.”
NOVEMBER 7, 2008